This information has been prepared by IG, a trading name of IG Australia Pty Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Superdry has seen a lack of demand for its winter coats and jumpers which account for 45% of its annual sales, with the fashion retailer placing the blame on ‘unseasonably hot weather conditions’ across Europe and the US.
The heatwave seen over the first half of the financial year, combined with the challenges faced by some of its trading partners like online retailer Zalando, is expected to negatively impact full-year profits by around £10 million.
‘Superdry is a strong brand with significant growth opportunities, backed by robust operational capabilities, but we are not immune to the challenges presented by this extraordinary period of unseasonably hot weather,’ CEO Euan Sutherland said. ‘We are well prepared for peak trading, but the second half of financial year 2019 presents both risks and opportunities.’
In the last three months, the company’s share price has steadily declined since one of its co-founders sold a 6.7% stake at £12.85 a share on 24 July, hitting a low of £7.88 a share on Monday.
The company also admitted in its trading update that its foreign exchange hedging practices have not provided adequate protection, adding a further £8 million in forex costs over the financial year.
‘There are significant opportunities ahead for Superdry in terms of geographical market expansion, category extensions and growth and the ability to leverage its multi-channel operating model in a digital world to deliver to customers in whichever way suits them best,’ Sutherland added.
Superdry will announce its first-half year results 2019 on 8 November.
.jpg)
